WOW this is a shocker. Someone at work today told me about the new 4p per mile mileage business rate for electric cars in the budget, and that it was to encourage Council's to get employees to drive elec. cars or provide elec fleet cars.

To be fair the 45p/mile rate that elec cars got, same as petrol cars, was rather generous. But 4p/mile is ridiculously low? There is still wear and tear, the usual tyres, and brake pads, steering, a chassis that can get rusty, and other bits and pieces, not to mention the battery, and high purchase price for anything useful range wise.

The Advisory Fuel Rates which HMRC publish are to reimburse company car drivers for business fuel used in company owned cars. This new rate does NOT affect drivers of privately owned vehicles who use them for company business, they can still claim expenses based on HMRC's completely separate Mileage Allowance Payments rate which remains at 45p per mile for the first 10000 miles of business mileage a year, and 25p per mile thereafter.

So, if you are a private car driver using it for company use, you can still claim the old rate from the company. If the company owns a car and allows you to use it privately and you charge it at home, you can now be reimbursed for the electricity you used at 4p per mile. Making this a doubly good development HMRC does not treat electricity as a fuel for car fuel benefit purposes, so there are no tax implications if they company let's you use company electricity for personal driving.